Equal Pay Day

After all, he’s a politician. It’s an election year. Sadly, exaggerating problems and making people angry is what passes for politicking these days.

But business managers and wage earners live in the real world, where workplace discrimination is far less simple.

It turns out that experts don’t know how to measure the problem, let alone solve it.

In his State of the Union address in January, Obama apparently referred to a 2008 Census study that found working women’s median annual earnings were about 77 percent of men’s (2012 federal data put the figure at 81 percent).

“That is wrong, and in 2014, it’s an embarrassment,” the president said.

The clear implication was that discrimination caused the pay gap. If he’s right, that gap of 22 cents for every dollar is a genuine outrage.

However, more careful analysts have found a variety of less insidious explanations for gender pay differences. Most appear to flow from freedom of choice.

Yes
29% (373)

No
71% (916)

For example, women tend to avoid high-paid fields that are risky, technical or volatile, such as energy production, computer engineering or finance.

Highly qualified women are more likely to seek lower-paying jobs in nonprofits that offer flexible schedules.

Women tend to work fewer hours. And more women leave jobs to care for children and parents, resulting in fewer years of work experience.

Adjusting for such factors narrows the gender gap dramatically.

The unexplained pay difference shrank to 7 cents in a recent study by the left-leaning American Association of University Women that focused on women a year after they left college.

Another study, this time by the right-leaning American Enterprise Institute, found a gender gap of 3.3 cents.

Adding to the confusion, it seems that “average pay” can be sliced many ways.

One giant longitudinal study, which began in 1979 and has followed more than 11,000 students over the years, found in 2000 (when subjects were ages 35 to 43) the average hourly wage for women was 7.9 percent higher than that of men.

So Obama’s assertion that, on average, women earn 77 cents for each dollar paid to men doesn’t tell us much.

To demonstrate the point, those pesky AEI researchers released a study showing that women on Obama’s White House staff earn 88 cents for every dollar he pays the men.

Jay Carney, the president’s press secretary, explained that more women fill lower-level positions than men at the White House. When women and men hold the same positions, they make the same, he said.

Yet the perils of setting federal policy based on misleading aggregate wage data are apparently lost on this administration.

On the theory that “transparency” might cure pay disparities, Obama signed a directive Tuesday that will require federal contractors to provide aggregate compensation data by race and gender. He also will forbid retaliation against workers who discuss their pay with each other, a protection that’s already in California law.